Goal-based investing is a contemporary approach to wealth management. It puts an emphasis on investing with a specific objective of achieving life goals. The goal can be buying a house, saving for retirement or your child’s education. This goal-centric approach can certainly help you manage your investment in the best possible way. Moreover, it also provides a clear process for identifying goals and choosing investment strategies accordingly.
Some of the important aspects that provide goal-based investing an edge over random investing are stated below:
Takes care of your savings
As a result of goal-based investing, you plan your life goals and develop a practical approach towards fulfilling it. By putting your expectations in the right perspective, you align your savings with your future requirements. Since goal-based investing makes you aware of the amount of money you would require for your future goals, it is unlikely for you to be misled from your saving ability.
Fetches more returns
Based on the accuracy of your goals and by saving for them well in advance, you can achieve high returns. Compound returns can make a big difference to your savings. The returns can help your money beat inflation and increase your purchasing power over time.
Avoids the cycle of debt
Since goal based investing requires you to plan your life goals in advance and save for them in a disciplined manner, it can play a vital role in your financial stability. Additionally, goal-based investing also makes you less vulnerable to debts and improves your spending habits.
Inculcates positive saving behavior
Setting goals will allow you to make decisions based on the status and priority of each of your goals. This will help you save individually for each of those without relying on one’s saving o fulfill the other’s needs.
Unit Linked Insurance Plan (ULIP) is a wonderful goal-based investment tool that has been designed to help you meet your financial goals. Though it is an insurance plan, ULIP gives investors both insurance and investment under a single integrated plan. There are several benefits of a ULIP plan. Let us have a quick look at some of the most important benefits of ULIP.
Flexible investment options
Depending upon your risk-taking ability, you can opt for a high, medium or low-risk investment option under the same policy. In addition to that, ULIPs also provide flexibility to choose either the sum assured or the premium based on your requirements.
With ULIPs, you can also opt for partial withdrawals in case of any unforeseen events.
Tax benefits and disciplined savings
Under section 80c of the Income Tax Act, you can avail tax benefits on the premiums paid towards this policy. Moreover, ULIPs can also help you adhere to regular saving habits.
With the help of prominent financial institutions, you can easily avail a ULIP plan and save for a better tomorrow. Moreover, many financial institutions also offer easy online claim process. So why wait? Give your life goals a sense of security by opting for goal-based investing, today.